Deprivation Index

A DEVELOPMENT INDEX is any measure of wellbeing that combines a variety of quality-of-life variables into a composite statistic, while a deprivation index is any measure of poverty that combines a variety of indicators of social ills into a composite statistic. While per capita income is the most commonly used and most widely accepted measure of a country's economic achievement, deprivation indexes provide a broader measure of the overall level of poverty in a country by focusing on a variety of statistics beyond simply income and may, therefore, better reflect a country's true level of development.

Probably the best known deprivation index is the Human Poverty Index (HPI), which has been published at the country level by the United Nations Development Program (UNDP) since 1997. The UNDP calculates the HPI differently for developing countries and highincome nations. The Human Poverty Index for rich countries, known as the HPI-2, is the weighted average of four variables: the percentage of the population not surviving to age 60, the level of functional illiteracy among adults in the country, the percentage of people living below the income poverty line defined as 50 percent of the median adjusted disposable household [Page 256]income, and the rate of long-term unemployment exceeding one year in duration.

The Human Poverty Index for developing countries, HPI-1, is the weighted average of three variables: the probability of a person not surviving to age 40, the adult illiteracy rate, and the combined percentage of the population without access to safe water and the prevalence of underweight children. Both the HPI-1 and HPI2 are weighted in such a manner as to place a greater emphasis on the components in which there is the highest level of deprivation.

The New Zealand Index of Deprivation measures poverty in regions of the country by combining the percentages of people who receive a means-tested benefit, are unemployed, have an income below a set threshold, have no access to a telephone, have no access to a car, live in a single-parent family, have no job qualifications; do not live in their own home, and live in a household below a designated bedroom occupancy threshold.

The Index of Multiple Deprivation measures poverty in the United Kingdom using multiple indicators within seven broad domains: income deprivation; employment deprivation; health deprivation and disability; education, skills, and training deprivation; barriers to housing and services; living environment deprivation; and crime.

The State University of New York Social Deprivation Index, which is calculated for most metropolitan areas in the United States, combines the poverty rate, per capita income, percentage of population aged 5 and older speaking a foreign language at home and reporting that they speak English “not well” or “not at all,” unemployment rate, percentage of population 25 and older with no high school diploma, and the violent crime rate per 100,000 population.

As might be predicted, the primary criticism of any deprivation index is the choice of variables used to calculate the index as well as the weights placed on each of the variables. In addition, as with most national or regional measures of poverty, a relatively low overall deprivation index can disguise pockets of extreme poverty within certain geographical areas or ethnic groups.

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